Climate on the Line: The Bill, the Exit, and the Future of Malaysia’s Green Agenda

Prepared by Aliya Waheedah 10 June 2025 Introduction As floods become a yearly calamity and the haze returns with fresh vigour, Malaysia’s long-awaited National Climate Change Bill is about to bring legal teeth to the country’s climate commitments. However, to truly advocate for responsibility, this bill should go beyond being symbolic.  In recent years, Malaysia has experienced severe rainfall, particularly during the monsoon season, leading to widespread flooding. This shift is consistent with global patterns of downpours linked to climate change. In addition, Malaysia has experienced heat waves, including extreme temperature peaks, as well as coral bleaching episodes, highlighting the country’s sensitivity to climate change.  Bank Negara Malaysia forecast that between 1998 and 2018, more than 50 natural disasters pertinent to climate change cost the Malaysian economy around RM8 billion. Additionally, it is anticipated that the climate crisis will affect more than three million Malaysians, resulting in displacement, damage, and even death. Heading into the future, 10.3% of bank assets and 24.4% of insurance company assets are at peril as a result of climate change. National Climate Change Bill: What it is and why it matters. Malaysia's proposed National Climate Change Bill (RUUPIN) is an important step towards institutionalising the country's climate action framework, laying out systems for greenhouse gas reporting, carbon trading, and the establishment of a National Climate Fund. The RUUPIN draft aims to: (1) legally anchor the country’s climate commitments by setting national emission reduction targets and creating a regulatory body to enforce them; (2) propose a National Climate Fund to support green initiatives, mandatory emissions reporting; and (3) centralise the climate data platform, National Integrated Climate Data Repository (NICDR), to guide decision-making. The bill further sets up carbon trading mechanisms to align with worldwide markets, like Internationally Transferred Mitigation Outcomes (ITMOs), alongside consequences for non-compliance. While it looks like a solid framework, delivering a successful implementation remains crucial to its effectiveness.  Despite these proposals, the measure has received widespread criticism for lacking openness and public participation during the drafting process. Civil society organisations and environmentalists have called for a more comprehensive consultation process and the establishment of permanent settings to ensure stakeholder participation. One of the most significant concerns is that the law does not specifically guarantee Free, Prior, and Informed Consent (FPIC) for Indigenous groups, whose lands and livelihoods are most severely impacted by climate-related projects.  Critics believe that the bill unduly focuses on mitigation and misses crucial adaptation strategies required to safeguard vulnerable populations from climate-related calamities. There is also a demand for improved data transparency through a centralised climate risk dashboard and mandatory data sharing across authorities. Many support the setup of an Independent Climate Change Commission to oversee operations and establish responsibility. In addition to making the bill stronger, addressing these demands would also align the bill with the principles of long-term resilience, inclusivity, and climate justice.  Recent Changes in Malaysia’s Green Energy Landscape Malaysia's green energy trajectory is at a turning point with the proposed resignation of Nik Nazmi Nik Ahmad as Minister of Natural Resources and Environmental Sustainability. His tenure was instrumental in charting Malaysia’s course toward a sustainable future, and his resignation raises concerns about Malaysia's climate plans and its position in the regional renewable energy landscape.  Illustrative of his contributions to Malaysia's green energy landscape, the National Energy Transition Roadmap (NETR) outlined a strategic pathway to achieve net-zero emissions by 2050. The roadmap's main goal is to increase the proportion of renewable energy, especially hydroelectric and solar power, in the country's energy mix.  The minister also implemented significant reforms to advance environmental governance. Primarily, he oversaw changes made to the Environmental Quality Act 1974 (Act 127), which improved the legal framework for environmental protection. Additionally, he made environmental impact assessments (EIAs) more publicly available, increasing accountability and community involvement in environmental decision-making.  Nik Nazmi promoted Malaysia's proactive involvement in regional and green economic cooperation, especially through programs like the ASEAN Power Grid (APG) and International Greentech & Eco Products Exhibition & Conference Malaysia (IGEM). Through APG, Malaysia helped integrate renewable energy sources throughout Southeast Asia and improve regional energy security. At the same time, IGEM also acted as a platform to showcase Malaysia’s dedication to sustainable development and draw in investments in green technology. Under his direction, IGEM 2024 sought to produce RM4 billion in business leads, solidifying the nation’s standing as the region’s leader in the green economy.  Navigating the Transition: Opportunities and Challenges The departure of Nik Nazmi as Minister of Natural Resources and Environmental Sustainability coincides with a pivotal moment in Malaysia’s aspirations for green energy. Although his departure could briefly shake reliability in the short term, it also makes room for new leadership who can continue the programs. Even then, programs like the National Energy Transition Roadmap (NETR) and carbon capture initiatives predominantly rely on political will and steady leadership. Therefore, policy regularity is an ongoing concern.  A sharp shift in direction might alarm investors and hinder progress toward renewable energy targets. Collaboration at a regional level is also at stake. Malaysia's active involvement in projects such as the ASEAN Power Grid (APG) depends on competent, dependable leadership to uphold confidence and fortify ties with neighbouring countries. Furthermore, investor sentiment is perceptive. For Malaysia to entirely transition its energy systems, an estimated RM637 billion is required, and any policy uncertainty may cause potential funders to rethink their investment. If Malaysia takes the appropriate steps, the country has a genuine opportunity to solidify its position as a leader in green energy in the years to come. This requires having a visionary leader at the helm, someone who shares Nik Nazmi’s climate focus and commitment to see current initiatives through. Beyond that, the government should work on strengthening the legal and institutional frameworks that support major policies like the proposed National Climate Change Bill (RUUPIN). This way, these initiatives can outlast political changes and stay on track regardless of who’s in charge.  Moving Forward To ensure the National Climate Change Bill effectively responds to Malaysia’s climate challenges, it must reflect the voices and concerns of a broad range of stakeholders. This includes enhancing public participation, protecting Indigenous rights, focusing on climate adaptation, ensuring data transparency, establishing independent oversight, and securing equitable climate financing. At the same time, stakeholder engagement must stay front and centre, bringing together civil society, local communities and businesses to build wider support and improve the bill’s implementation. Keeping the public and investors informed about progress and direction helps build confidence and ensures everyone stays on board. This will help build trust among the public and investors alike, keeping everyone aligned with Malaysia’s green transition goals. While leadership changes pose unpredictability, they also offer a chance to reaffirm commitments and vitalise efforts toward a sustainable future. By building on existing foundations, Malaysia can continue to lead in the regional green energy arena and achieve its climate goals. A climate law in name alone will not protect future generations. If the National Climate Change Bill is to truly represent a turning point in Malaysia’s climate governance, it must be built not just on targets, but on trust, transparency, and transformative change. References : BERNAMA. “Malaysia To Advocate For Sustainable Policies Across ASEAN.” BERNAMA , April 15, 2025. Malaysia To Advocate For Sustainable Policies Across ASEAN. ———. “Nik Nazmi Resigns As Natural Resources And Environmental Sustainability Minister.” BERNAMA , May 28, 2025. Nik Nazmi Resigns As Natural Resources And Environmental Sustainability Minister. Consultation Paper on the Proposed Climate Change Bill (RUUPIN) (2024). 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